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The Daily Fozzy Method

  • #1,581
  • Jan 23, 2007 3:33pm Jan 23, 2007 3:33pm
for the life of me i cant see where the usdchf took an upward willf fozzy in recent days..the last time this happened was on the 4th jan....must be down to different broker feeds...

i
Quoting paul2
I took a position on USD/CHF, which has been going sideways for the last 10 days. RSI crossed up over it's MA, which was all above 50- and the solar wind was indicating an up trend. However, this morning the position tanked and now solar winds is indicating a down trend, and it redrew the last 3-4 days. I wish I had taken a screen shot of the trade last night, but oh well. Either way, I'm very skeptical of this indicator.
  • #1,582
  • Jan 23, 2007 4:03pm Jan 23, 2007 4:03pm
Quoting coolshades
for the life of me i cant see where the usdchf took an upward willf fozzy in recent days..the last time this happened was on the 4th jan....must be down to different broker feeds...

i
There was a move above the MA yesterday but it was so slight (and near resistance) I ignored it.

Maybe with a different broker and different time the cross would have been more obvious.
Attached Image
  • #1,583
  • Jan 23, 2007 5:50pm Jan 23, 2007 5:50pm
Quoting willf

Yes, all correct.
Great! Think I caught up with you guys.
Now to watch and learn in real time.

Thanks Willf!
  • #1,584
  • Jan 23, 2007 7:03pm Jan 23, 2007 7:03pm
Hi Willf
One more question, please.

Upon entering a trade, you set the 1st TP at the next fib levels,
and the 2nd TP at the 2nd fib levels. Set and leave it, right?

When you return the next day to check, and if the trade is going
in your direction, but both TPs have not been hit, do you adjust
the TP figures, assuming the fib levels have also changed overnight??

I guess what I'm asking is as the fib levels change with time, do you
keep adjusting your take profit order?

As for SL, you simply set it at previous day high/low, correct?

Thanks

fj
  • #1,585
  • Jan 23, 2007 7:21pm Jan 23, 2007 7:21pm
Quoting fjfx
Hi Willf
One more question, please.

Upon entering a trade, you set the 1st TP at the next fib levels,
and the 2nd TP at the 2nd fib levels. Set and leave it, right?

When you return the next day to check, and if the trade is going
in your direction, but both TPs have not been hit, do you adjust
the TP figures, assuming the fib levels have also changed overnight??

I guess what I'm asking is as the fib levels change with time, do you
keep adjusting your take profit order?

As for SL, you simply set it at previous day high/low, correct?

Thanks

fj
Yes. As the trade develops I adjust my TP levels.

Unless there is an area of high resistance before the fib then I may set my TP at that point instead.

Yes, for stop loss I am using the previous days high/low.
  • #1,586
  • Jan 23, 2007 8:41pm Jan 23, 2007 8:41pm
Quoting willf
Yes. As the trade develops I adjust my TP levels.

Unless there is an area of high resistance before the fib then I may set my TP at that point instead.

Yes, for stop loss I am using the previous days high/low.

Thanks buddy for the quick reply. You've been a great help!
  • #1,587
  • Edited 8:00am Jan 24, 2007 7:46am | Edited 8:00am
Quoting paul2
I took a position on USD/CHF, which has been going sideways for the last 10 days. RSI crossed up over it's MA, which was all above 50- and the solar wind was indicating an up trend. However, this morning the position tanked and now solar winds is indicating a down trend, and it redrew the last 3-4 days. I wish I had taken a screen shot of the trade last night, but oh well. Either way, I'm very skeptical of this indicator.
There are other factors you have to consider:

1. Price action is king!....The one thing I wont do is put a trade on at the close of the day candle, especially on one of the three European/Usd majors... The price action was short for the Usd/Chf, killing any long position trade.

2. Take a look at the charts... The Usd/Chf has been going sideways since 1-11, and consolidating in a wedge since 1-18. To put on a position trade until it broke out of this pattern is a big no-no... It actually broke out short, I'm still irked I wasn't up to trade it short.

3 Never ignore S & R... My charts show R at 2525-2530 and 2545... The price never approached these levels, much less tested or broke them.
  • #1,588
  • Jan 24, 2007 10:42am Jan 24, 2007 10:42am
I like this method, will test it after reading the entire thread! took ages!
  • #1,589
  • Jan 26, 2007 11:37am Jan 26, 2007 11:37am
Hello, everybody,

Following the trades to which I referred in a post (# 252) I made over on the Fozzy journal thread (Journal Forum) here : http://www.forexfactory.com/showthre...t=11273&page=7 where I described my updated 2007 way of Fozzy trading (sorry, should have been on this thread…), I have been thinking a great deal about stops for winning positions.

Original Fozzy is quite unusual in that it takes daily signals with relatively small targets. “Ride the winners & cut your losers” sounds simple, but it is easy to achieve the opposite (with any method). Those familiar with van Tharp will know he expounds strongly on the importance of thinking in terms of R (risk) multiples, or expectancy. Most of the great traders emphasise the importance of catching the really big market moves.

So that is what I am trying to do. With other methods that I use, I always try to have a first profit target of 2R, ie. 2 x my risk. Using a Fozzy stop above / below the previous daily bar with a first TP at the nearest fib band can give as little as 0.25R and rarely more than 1R. I want to stress that I understand that some are doing very well trading this way – the purpose of this post is to share my thinking to try to improve results still further.

In 2007 I want to hold trends as long as possible… “Ride that sucker till it ends” (Ed Seykota), so I have been looking not so much at initial stops – Beach, willf & others have shared some fantastic info here (and I agree the 70%ATR(20) to previous daily bar areas seem appropriate) – but at stops on winning trades.

The best I have come up with is to use a proprietary ATR trailing stop indicator – there’s something almost identical in this post / method : http://www.forexfactory.com/showpost...7&postcount=35 . However, using this on the daily chart is simply too wide : I am actually experimenting right down to a 30min chart ! As a reference I am looking at the amazing move in GBPUSD from 21/11 to 1/12 last year – the 30min ATR stop “rode that sucker till the end” – it was a 700 pip move : disappointing to have taken only a couple of hundred pips out of it when so much more was available. So this is what I will start using next week, for my third lot at least (I always trade in multiples of 3). It does of course raise an issue about how much time a trader wants to devote to trade (mis)management…. Original Fozziers will not have the time to do this.

The second factor is how to get that R multiple up by increasing TP levels, especially the first one, and whether shooting for at least 1R on the first profit target will degrade or improve performance : my personal 2007 Fozzy filters are attempting to reject as many trades as possible to help this… I am forward testing live as always.



J.
  • #1,590
  • Jan 27, 2007 1:45pm Jan 27, 2007 1:45pm
Quoting jtrade
Hello, everybody,

Following the trades to which I referred in a post (# 252) I made over on the Fozzy journal thread (Journal Forum) here : http://www.forexfactory.com/showthre...t=11273&page=7 where I described my updated 2007 way of Fozzy trading (sorry, should have been on this thread…), I have been thinking a great deal about stops for winning positions.

Original Fozzy is quite unusual in that it takes daily signals with relatively small targets. “Ride the winners & cut your losers” sounds simple, but it is easy to achieve the opposite (with any method). Those familiar with van Tharp will know he expounds strongly on the importance of thinking in terms of R (risk) multiples, or expectancy. Most of the great traders emphasise the importance of catching the really big market moves.

So that is what I am trying to do. With other methods that I use, I always try to have a first profit target of 2R, ie. 2 x my risk. Using a Fozzy stop above / below the previous daily bar with a first TP at the nearest fib band can give as little as 0.25R and rarely more than 1R. I want to stress that I understand that some are doing very well trading this way – the purpose of this post is to share my thinking to try to improve results still further.

In 2007 I want to hold trends as long as possible… “Ride that sucker till it ends” (Ed Seykota), so I have been looking not so much at initial stops – Beach, willf & others have shared some fantastic info here (and I agree the 70%ATR(20) to previous daily bar areas seem appropriate) – but at stops on winning trades.

The best I have come up with is to use a proprietary ATR trailing stop indicator – there’s something almost identical in this post / method : http://www.forexfactory.com/showpost...7&postcount=35 . However, using this on the daily chart is simply too wide : I am actually experimenting right down to a 30min chart ! As a reference I am looking at the amazing move in GBPUSD from 21/11 to 1/12 last year – the 30min ATR stop “rode that sucker till the end” – it was a 700 pip move : disappointing to have taken only a couple of hundred pips out of it when so much more was available. So this is what I will start using next week, for my third lot at least (I always trade in multiples of 3). It does of course raise an issue about how much time a trader wants to devote to trade (mis)management…. Original Fozziers will not have the time to do this.

The second factor is how to get that R multiple up by increasing TP levels, especially the first one, and whether shooting for at least 1R on the first profit target will degrade or improve performance : my personal 2007 Fozzy filters are attempting to reject as many trades as possible to help this… I am forward testing live as always.



J.
Hi J

It would be very helpful if you explain what your filters are for the Fozzy trades.

Fozzy method is attractive because it needs only once per day attention, using ATR stops on 30 min will deviate from this purpose.
If you had simply moved your stop to a few pips below the previous day's bar at the end of each day you could have captured the same 700 pips or so as you mention without using lower time frames.

Please post the results of all your tests and investigations so every one can benefit.
Regards
  • #1,591
  • Jan 27, 2007 4:35pm Jan 27, 2007 4:35pm
Hi, Howard,

Quote
It would be very helpful if you explain what your filters are for the Fozzy trades.

All in my post # 252 on the journal thread to which I referred.

Quote
Fozzy method is attractive because it needs only once per day attention, using ATR stops on 30 min will deviate from this purpose

I am not trading Original Fozzy.

Quote
If you had simply moved your stop to a few pips below the previous day's bar at the end of each day you could have captured the same 700 pips or so as you mention without using lower time frames.

BUT if the move had reversed, you could have had a very large giveback : I want to stay in the really big moves whilst not giving back too much on the far more frequent reversals that happen to most trades.

Quote
Please post the results of all your tests and investigations so every one can benefit.

Well, if you load the ATR indicator from The Bat method from Team Aphid, to which I posted a link, onto 30 minute charts (or 60 min if it's fixed to the timeframe of their method, which is possible), and then experiment with the settings, you will indeed see for yourself where I am coming from and perhaps share something I have missed.

I have changed my trade tracking template for 2007 - I will post a screenshot of it it here for people to see. I think it is mostly self-explanatory, but please ask if anything is unclear. I appreciate it only shows my first 3 trades of 2007 (I was away until 2 weeks ago). Like BeachBum, I like to keep detailed records of my trades : in addition to the really obvious columns, I am recording :

* Is price at signal above or below the tunnel ?
* Is trade with or against the weekly trend based on 55 period AMA ?
* DP = is signal rejecting a Decision Point (see journal post) ?
* Do I have STF divergence (see journal post) ?
* RSI level at time of signal (NB : I have been toggling between the end of previous daily bar RSI reading and the reading at time of entry, so beware) ?
* 20sma relates to the Original Fozzy rule re the BB centreline.
* risk is the initial stop I actually placed with entry.
* colour coding is mostly obvious, but I do not c/code the market column until the trade is filled : this is helpful on days when they are several orders placed; the stops columns are coded after the trade to show me which stops "worked" in the sense that they allowed the first profit target to be reached; lastly, I fill in the target exits prior to entry and colour code after they are hit (I only place the first profit target order at time of entry, so if there is a big overnight move as there was with the EURAUD trade, a target fill may be larger than originally planned).
* I want to track my NAV this year : does anyone please have a simple NAV calculator that takes account of additions to and withdrawals from the account (I have been unable to find one - some simple Excel code would do it) ?

HTH !

J.
Attached File(s)
File Type: doc jjFz tracking template example.doc   50 KB | 783 downloads
  • #1,592
  • Jan 28, 2007 2:16am Jan 28, 2007 2:16am
Quoting migamb
Fellow traders, I was looking for the indicator that puts the arrow on the candle we should buy/sell, I only found the indicator that shows the line going to 0 or 100 to signify the buy/sell. Can someomen point me to were I can get this indicator? Thanks.

i think its shi signal or something like that.try search at tlatomi tread they use that kind of indicator but it work with snipers CCI.i use it back then but it seem to be repaint and fade the last signal.but if u use it where snipers CCI value 100 or -100 its quite good at least for 50 pips.but despite of thise two inicator...the real arrow is to trust the indicator itself.indicators are made not for nothing anyway
"Analysis Is Hard But Trade Is Easy"
  • #1,593
  • Jan 28, 2007 11:44am Jan 28, 2007 11:44am
Howdy all,

In discussing a trailing stop method to capture every last pip, I came upon this page using a method called ATR Ratchet. Thought it was interesting and I'm going to test it. Here is the link:

http://traderclub.com/cgi-bin/discus/show.cgi?107/107

After reading this click on the Bulletins link on the menu a lot of great reading(like U don't already have enough) :surprised

Fellow Pip Hunter
Bill
"When there is no peril in the fight there is no glory in the triumph."
  • #1,594
  • Jan 28, 2007 11:15pm Jan 28, 2007 11:15pm
Hi fellow fozzy-ers,

This is very interesting topic, how to catch those big moves. I would like to share my view although I don't have much trading experience, about 1 year all in all, was following fozzy from his first post, and after a lot of struggle I finally settled with a simple thing.

I am trading only GBP/USD, and when there is a fozzy signal, I enter with 2 lots, or 3, or whatever number the risk percentage will allow at that moment, put the SL at the low or high of the previous day. Then I wait till trade goes ATR(10) pips my way (that's usually anything between 80 to 100 pips) and close half of the lots, move SL to break even for the rest and let them ride. At the end of every day I move SL to the low or high of previous day, or even a little bit closer to the market if the day was very volitale. And when I finally get stopped out, it's usually a nice bunch of pips coz cable has very nice moves, day after day.

Just my 2 pips

branac
  • #1,595
  • Jan 29, 2007 8:41am Jan 29, 2007 8:41am
Quoting branac
Hi fellow fozzy-ers,

This is very interesting topic, how to catch those big moves. I would like to share my view although I don't have much trading experience, about 1 year all in all, was following fozzy from his first post, and after a lot of struggle I finally settled with a simple thing.

I am trading only GBP/USD, and when there is a fozzy signal, I enter with 2 lots, or 3, or whatever number the risk percentage will allow at that moment, put the SL at the low or high of the previous day. Then I wait till trade goes ATR(10) pips my way (that's usually anything between 80 to 100 pips) and close half of the lots, move SL to break even for the rest and let them ride. At the end of every day I move SL to the low or high of previous day, or even a little bit closer to the market if the day was very volitale. And when I finally get stopped out, it's usually a nice bunch of pips coz cable has very nice moves, day after day.

Just my 2 pips

branac
Hi Branac,

Simple is the best. Your fozzy method on cable will give you 3-4 good signals per month. That's probably 200-300 of sure pips (lower estimate from my fozzy experience). For some people I know on this forum, that's more then enough; yet their pip value is > $ 10.
Steady and consistently up, up and away.

Cheers,
R
  • #1,596
  • Jan 29, 2007 10:51am Jan 29, 2007 10:51am
Quoting raczekfx
Hi Branac,

Simple is the best. Your fozzy method on cable will give you 3-4 good signals per month. That's probably 200-300 of sure pips (lower estimate from my fozzy experience). For some people I know on this forum, that's more then enough; yet their pip value is > $ 10.
Steady and consistently up, up and away.

Cheers,
R
Eeeeeexactly raczekfx, that's my plan. To make consistently 200 to 300 pips every month, and than simply increase the pip value as my account grows. Fozzy<->Cable is really a powerful combination.

Thank you Fozzy

branac
  • #1,597
  • Jan 29, 2007 1:26pm Jan 29, 2007 1:26pm
Quoting branac
Hi fellow fozzy-ers,

This is very interesting topic, how to catch those big moves. I would like to share my view although I don't have much trading experience, about 1 year all in all, was following fozzy from his first post, and after a lot of struggle I finally settled with a simple thing.

I am trading only GBP/USD, and when there is a fozzy signal, I enter with 2 lots, or 3, or whatever number the risk percentage will allow at that moment, put the SL at the low or high of the previous day. Then I wait till trade goes ATR(10) pips my way (that's usually anything between 80 to 100 pips) and close half of the lots, move SL to break even for the rest and let them ride. At the end of every day I move SL to the low or high of previous day, or even a little bit closer to the market if the day was very volitale. And when I finally get stopped out, it's usually a nice bunch of pips coz cable has very nice moves, day after day.

Just my 2 pips

branac
Which version of fozzy do you use for this style?
Regards
  • #1,598
  • Jan 29, 2007 1:32pm Jan 29, 2007 1:32pm
Hello J......

I enjoy reading and digesting your posts and would like to share with you my thinking and experience combined with the Fozzy Daily.

In the beginning I had a very hard time rationalizing the concept of setting a S/L equal to 70% ATR(20) with a T/P equal to that amount or even less, because like you, I had ingrained my self to always trade with a R/R of 1:1 or greater. However, after working with this method for some time, I finally realized that using the appropriate S/L for each pair (I have already explained more than once how I arrive at this value) kept me in such a large percentage of winning trades (over 90%) that it did not really matter that the R/R was sometimes less than 1:1. In plain terms, I had (and still do have) so many winners, the occasional looser did not really diminish my overall pip gain. As long as the trader can psychologically adjust to the drawdown necessary to stay in the trade until it becomes a winner, with the realization that there will be the occasional looser, the end result is very rewarding. This mental aspect of trading is IMO more critical that the technical part. This is one of the reasons I like this method and profit nicely from it without making things too complicated.


Quoting jtrade
Hello, everybody,

Following the trades to which I referred in a post (# 252) I made over on the Fozzy journal thread (Journal Forum) here : http://www.forexfactory.com/showthre...t=11273&page=7 where I described my updated 2007 way of Fozzy trading (sorry, should have been on this thread…), I have been thinking a great deal about stops for winning positions.

Original Fozzy is quite unusual in that it takes daily signals with relatively small targets. “Ride the winners & cut your losers” sounds simple, but it is easy to achieve the opposite (with any method). Those familiar with van Tharp will know he expounds strongly on the importance of thinking in terms of R (risk) multiples, or expectancy. Most of the great traders emphasise the importance of catching the really big market moves.

So that is what I am trying to do. With other methods that I use, I always try to have a first profit target of 2R, ie. 2 x my risk. Using a Fozzy stop above / below the previous daily bar with a first TP at the nearest fib band can give as little as 0.25R and rarely more than 1R. I want to stress that I understand that some are doing very well trading this way – the purpose of this post is to share my thinking to try to improve results still further.

In 2007 I want to hold trends as long as possible… “Ride that sucker till it ends” (Ed Seykota), so I have been looking not so much at initial stops – Beach, willf & others have shared some fantastic info here (and I agree the 70%ATR(20) to previous daily bar areas seem appropriate) – but at stops on winning trades.

The best I have come up with is to use a proprietary ATR trailing stop indicator – there’s something almost identical in this post / method : http://www.forexfactory.com/showpost...7&postcount=35 . However, using this on the daily chart is simply too wide : I am actually experimenting right down to a 30min chart ! As a reference I am looking at the amazing move in GBPUSD from 21/11 to 1/12 last year – the 30min ATR stop “rode that sucker till the end” – it was a 700 pip move : disappointing to have taken only a couple of hundred pips out of it when so much more was available. So this is what I will start using next week, for my third lot at least (I always trade in multiples of 3). It does of course raise an issue about how much time a trader wants to devote to trade (mis)management…. Original Fozziers will not have the time to do this.

The second factor is how to get that R multiple up by increasing TP levels, especially the first one, and whether shooting for at least 1R on the first profit target will degrade or improve performance : my personal 2007 Fozzy filters are attempting to reject as many trades as possible to help this… I am forward testing live as always.



J.
  • #1,599
  • Edited 2:46pm Jan 29, 2007 2:44pm | Edited 2:46pm
Quoting BeachBum
In plain terms, I had (and still do have) so many winners, the occasional looser did not really diminish my overall pip gain. As long as the trader can psychologically adjust to the drawdown necessary to stay in the trade until it becomes a winner, with the realization that there will be the occasional looser, the end result is very rewarding. This mental aspect of trading is IMO more critical that the technical part. This is one of the reasons I like this method and profit nicely from it without making things too complicated.
I'll tell you what Beach, your & Willf's amazing winning % are an inspiration to us all and I take your point about not getting hung up about r/r ratios with Fozzy. I also actively work on the pyschological aspects of my trading & find this not only helpful, but essential.

I feel that one of the challenges of trading is to constantly evolve one's method(s) and execution whilst (a) K.I.S.S. & (b) steadily accelerating one's account size.

Because of (a), I am not going to reveal what I have now decided to apply as a trailing method for my third lot ... at least not until I have 3 months or so of forward test. Suffice to say it's of the "Ride that sucker till the end" variety !!

Good trading to all.



J.

The goal is full size lots by the end of the year...
  • #1,600
  • Jan 29, 2007 3:14pm Jan 29, 2007 3:14pm
Quoting howard
Which version of fozzy do you use for this style?
I am using "Beach Fozzy", taking into account every cross regardless of the middle BB line position.

branac
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